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to be auditing these institutions, it’s now,” Martin told the Observer. In the end, Martin’s arguments held sway, as the bill was defeated on a vote of 87-14. “Based on conversations with various staff members at the Legislature, the Texas Observer editorial raised a lot of questions among members about the bill and what its real intent was,” said Janee Briesemeister of Consumer’s Union. “The questions raised by the editorial, along with the questions raised by Rep. [Mike] Martin [D-Galveston], had a major effect, on the outcome of the legislation.” Although Dickson acknowledges the deficiencies in the bill as it was originally conceived, he defends the revised version. “I became extremely concerned after I introduced it,” Dickson said. “But I think I fixed it until it does what I think needs to be done.” Still reeling from the bill’s unexpected defeat in the House, Dickson said he will give the matter further consideration before deciding whether to reintroduce it later. “I don’t plan to deal with it until next session,” he said. Big Banks Kill Consumer Credit Relief As anyone who’s applied for a loan lately can attest, the savings and loan meltdown, combined with the growing trend toward consolidation of the banking industry, has created a serious credit crunch for consumers. Rep. Pete Patterson, D-Brookstone, set out to rectify that situation with a measure that, he hoped, would encourage local lending. Patterson’s proposal, House Bill 236, would have imposed , a 5-percent tax on the difference between a bank’s deposits and its local loans. \(TO, the firgt $300 million in deposits were exempt, and local loans would have been credited at $1.75 on the dollar. ` The initiative drew the immediate ire of some of banking’s most powerful institutions. The $300-million exemption meant that the bill would affect only the largest banks operating in the state, namely North Carolina institutions that have been widely criticized for failing to reinvest in the community. These megabanks, naturally, brought considerable pressure to bear to ensure the measure’s defeat. After passing out of committee, the bill died in the powerful Calendars Committee, chaired by Rep. Hugo Berlanga, D-Corpus Christi. “Hugo held it up in Calendars,” said Kevin McCommon, who advises Patterson on banking issues. “The big banks are very powerful and they lobbied him behind the scenes.” Berlanga did not respond to Observer requests for comment. While NCNB and Bank One aren’t saying what sort of pressure they may have exerted, they readily admit they weren’t sorry to see the bill die. “We’re pleased that it failed,” said John De La Garza, a spokesman for NCNB. “We hope “that its failure lies in the [Legislature’s] total look at tax restructuring. We don’t believe that a certain portion of the VIC HINTERLANG Rep. Hugo Berlanga banking industry should be singled out for taxation in this manner.” While NCNB and Bank One have won the first round, McCommon vows to keep on fighting. Keep an eye on this one. It ain’t dead yet, but it will probably take a legislator more influential than the ineffective Patterson to get it through. School Finance Bill Leaves All Parties Disappointed Probably more than a few veterans of the school finance battle are now looking back and asking themselves, as Peggy Lee once did, “Is that all there is?” Soon after the education bill was approved by both House and Senate on April 11, Earl Bolton, deputy superintendent of the Edgewood Independent School District, remarked,”After all the smoke clears, we might break even.” This, coming from an official of the school district that instigated more than two decades of court battles, doesn’t sound much like victory. When it all started with Rodriguez v. San Antonio Independent School District in 1968, young upstarts such as UT economics professor Dan Morgan envisioned that the case could revolutionize the United States government if they could successfully argue that poor people deserved the exact same quality of education as wealthy people did. At the time, they thought, the Supreme Court was liberal enough to conceive that poverty could be ruled a “suspect classification” like race or gender. If this principle could work for education, it could work for health care, and could spill into all the areas where the rich have an undeniable advantage over the poor simply by possessing money. More than 20 years later, the substance of this vision has transformed into a Texas-sized headache one that Rep. Ernestine Glossbrenner, D-Alice, referred to as an “ugly child.” Working from interpretations of four different opinions from district and appellate judges, the House and Senate education committees knew full well that whatever the means of equalization, it was going to cost dearly. They considered, among other things, a single statewide property tax district and e dreaded income tax. While members felt pressured to level the playing field as much as possible to avoid further court intervention the Texas Supreme Court had already twice ruled the code unconstitutional an opinion handed down in the midst of negotiations in the Capitol might have been detrimental to the propertypoor districts. Some legislators’ say that a conservative swing in the Texas Supreme Court, in its “clarification” of what the Love v. Dallas case meant to Edgewood, limited the scope of equity by allowing property-wealthy districts to keep more of their funds. Two weeks after the deadline set by the courts, Richards signed into law an education bill that shifted hundreds of millions of dollars from wealthy to poor districts by new taxing regions largely situated on county lines. The Legislature set a minimum property tax rate at $.72, to be raised gradually to $1 by 1995. Rep. Paul Colbert, D-Houston, told the Austin American-Statesman, “This is not only a reasonable plan, it is the most equalizing plan to ever reach the floor of the Legislature, let alone pass.” But property-poor districls are not happy with the unequalized enrichment, and several property-wealthy districts have challenged the constitutionality of the new law in court. What also remains to be figured is the real price tag. Lt. Gov. Bob Bullock released figures from the Texas Education Agency estimating that the new law would cost $15.9 billion in additional property taxes and $7.6 billion in state taxes over the next five years. House Speaker Gib Lewis and his pal Rep. Bruce Gibson quickly accused Bullock of trying to “panic” the public into supporting a state income tax, claiming that he had inflated the numbers to the worst-case scenario. Nevertheless, if the Legislature doesn’t push for an income tax, Sen. Carl Parker’s comment about the public education law will still ring true: “This will keep us number one in one thing. We may be 37th in education, but we’re number one in property tax growth.” Ethical Lapse: Richards, Legislature Cave on Ethics Reform The issue raised most often in the 1990 campaigns for state office was ethics. A number of incidents combined to bring the issue to prominence, including: the influence-peddling investigation by a Travis County grand jury of House Speaker Gib Lewis and his top lieutenant, Calendars Committee chairman Hugo Berlanga; poultry-industry magnate Lonnie ‘Bo’ Pilgrim handing out $10,000 “campaign contributions” to state senators on THE TEXAS OBSERVER 11 . .